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The ATO and the Tax Practitioners Board should educate practitioners on their new client verification obligations before mandatory standards are enforced, says one peak accounting body.
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New client verification standards require education: IPA
11 June 2021
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9 minute read
The Institute of Public Accountants believes the ATO’s new guidelines on client verification are a step in the right direction, but has urged the regulator to commence an education campaign as soon as possible.
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The new client verification standards require tax and BAS agents to sight two separate proof of identity documents when onboarding new clients.
The exception is when a primary photographic proof of identity document can be verified by the agent in person or by video.
Practitioners are expected to voluntarily adopt the new standards immediately, with the regulators aiming to make it compulsory from next year.
The ATO has assured practitioners that they are not expected to revisit and verify the identity of their entire client base as part of the transitional approach.
“Given the ramifications for the tax profession in adopting the client verification guidelines, we would anticipate that the TPB and the ATO need to engage in an education program to highlight to practitioners what will become compulsory business practices after the initial transition period ends,” said Tony Greco, general manager of technical policy at the IPA.
“The accounting bodies will do their bit in promoting good business processes for onboarding new clients, but the regulators need to promote updated expectations before new standards become mandatory.”
The new standards come as the ATO cites an increase in attempts by criminals to commit refund fraud by stealing the identities of taxpayers which has coincided with an increased reliance on technology and remote working practices.
“There have been many recent examples where tax practitioners have been used by fraudsters to illegally obtain a financial advantage by stealing another person’s identity,” Mr Greco said.
“The tax profession as guardians of our tax system need to play their role in minimising this increasing risk, particularly in an environment that now relies on technology and remote work practices.
“The IPA supports the overall purpose for which these measures are intended. The only caveat is that it does not overburden tax practitioners and fits within the firm’s natural business processes.”
View the ATO’s new client verification guidelines here.
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